APPENDIX " A" CERTIFICATION

I hereby certify that I have received and reviewed the entity's Investment Policy; and implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the entity and the organization that are not authorized by the entity' s Investment Policy, except to the extent that this authorization is dependent on an analysis of the makeup of the entity's entire portfolio or requires an interpretation of subjective investment standards. ( PFIA 2556. 005 ( k- 1)

All sales personnel of this firm dealing with the City of Southlake's account(s) have been informed and will be routinely informed of the City's investment horizons, limitations, strategy and risk constraints, whenever we are so informed by the City.

This firm pledges due diligence in informing the city of foreseeable risks associated with financial transactions connected to this firm.

FIRM REGISTERED PRINCIPAL OF FIRM

PRIMARY REPRESENTATIVE: NAME/ TITLE please print)

PRIMARY REPRESENTATIVE SIGNATURE DATE

Federal agency securities. Asked.

The price at which securities are offered. Bid.

the price offered for securities Broker.

A broker brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides; in contrast to a "principal" or a " dealer", he does not own or take a position in the security. In the money market, brokers are active in markets in which banks buy and sell money and in interdealer markets. Certificate of Deposit( CD). A time deposit with a specific maturity evidenced by a certificate. Collateral.

Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. Commercial Paper. Short- term, unsecured promissory notes issued by corporations to finance short- term credit needs.

Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Coupon.

The annual rate of interest that a bond' s issuer promises to pay the bondholder on the bonds face value. Also, a certificate attached to a bond evidencing interest due on a payment date.CUSIP.

A unique security identification number assigned to securities maintained and transferred on the Federal Reserve book -entry system. Dealer.

A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. Debenture.

A bond secured only by the general credit of the issuer. Delivery versus Payment. Delivery of securities with an exchange of money for the securities. Depository.

The bank selected by the City to provide depository services.Discount.

The difference between the cost price of a security and its value at maturity when quoted a lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. Discount

Securities. Non - interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g.,U. S. Treasury Bills.Diversification.

Dividing investment funds among a variety of securities offering independent returns.17

Federal Credit Agencies. Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., savings and loans, small business firms, students, and farmers.

Federal Deposit Insurance Corporation

FDIC). A federal agency that insures bank deposits, currently $ 250, 000 per deposit.

Federal Funds Rate. The rate of interest at which Federal funds are traded. This rate is currently set by the Federal Reserve through open -market operations.

Federal Home Loan Banks ( FHLB).

Created in 1932, this system consists of 12 regional banks, which are owned by private member institutions and regulated by the Federal Housing Finance Board. Functioning as a credit reserve system, it facilitates extension of credit through its owner -members in order to provide access to housing and to improve the quality of communities. Federal Home Loan Bank issues are joint and several obligations of the 12 Federal Home Loan Banks.

Federal Home Loan Mortgage Corporation ( FHLMC or Freddie Mac). A stockholder - owned corporation, which entered into government conservatorship in September 2008, that provides a continuous flow of funds to mortgage lenders, primarily through developing and maintaining an active nationwide secondary market in conventional residential mortgages. Freddie Mac purchases a large volume of conventional residential mortgages and uses them to collateralize mortgage - backed securities.

Federal National Mortgage Association

FNMA or Fannie Mae). FNMA, a federal corporation, is the largest single provider of residential mortgage funds in the United States. It is a private stockholder - owned corporation. The corporation' s purchases include a variety of adjustable mortgages and second loans in addition to fixed- rate mortgages. FNMA' s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.

Federal Open Market Committee

FOMC). Consists of seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open -market as a means of influencing the volume of bank credit and money.

Federal Reserve System. The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D. C., 12 regional banks and about 5, 700 commercial banks that are members of the system.

Government Agency Issues. A general term describing fixed and floating rate debt securities issued by Federal agencies, and instrumentalities, including government sponsored enterprises ( GSEs). Such GSE securities, including Fannie Mae, Freddie Mac, FHLB and FFCB, are not direct obligations of the Treasury and involve government sponsorship or guarantees.

Liquidity. A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the difference between bid and asked prices is narrow and reasonable size can be done at those quotes.

Local Government Investment Pool LGIP). The aggregate of all funds from political subdivisions that are placed in the custody of the state managed pool, or other qualifying pool(s) that meet state statute criteria, for investment and reinvestment.

Market Value. The price at which a security is trading and could presumable be purchased or sold.

Master Repurchase Agreement. To protect investors, many public investors will request that repurchase agreements be preceded by a master repurchase agreement between the investor and the financial institution or dealer. The master agreement should define the nature of the transaction, identify the relationship between the parties, establish normal practices regarding ownership and custody of the collateral securities during the term of investment, provide remedies in the case of default by either party and clarify issues of ownership. The master repurchase agreement protects the investor by eliminating the uncertainty of ownership and hence, allowing investors to liquidate collateral if a bank or dealer defaults during the term of the agreement.

Maturity. The date upon which the principal or stated value of an investment becomes due and payable.

Money Market. The market in which short- term debt instruments ( bills, commercial paper, bankers' acceptances, etc.) are issued and traded.

Mutual Funds. Mutual fund providers are investment companies that sell shares to investors, offering investors diversification and professional portfolio management. Prices fluctuate with the performance of the fund. Money market mutual funds invest in short- term securities such as treasury bills, bank CD's and commercial paper.

Open Market Operations. Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve' s most important and most flexible monetary policy tool.

Par. The value of a security as expressed on its face ( face value) without consideration of a discount or premium.

Portfolio. Collection of securities held by an investor.

Positive Yield Curve. A condition where interest rates are higher on long- term debt securities than on short-term debt securities of the same quality.

Premium. The price that a security demands over its par value. This is the difference between the price of an instrument and its value at maturity ( par value) when the price is higher than the maturity.

Primary Dealer. A group of government securities dealers that submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission ( SEC) registered securities broker -dealers, banks and a few unregulated firms.

Prudent Person Rule. An investment standard. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

Qualified Public Depositories. A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit

Protection Commission to hold public deposits.

Rate of Return. The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

Rating. A formal opinion by an outside professional service on the credit reputation of an issuer and the investment quality of its securities. This opinion is expressed in letter values e. g., AAA, Baal).

Repurchase Agreement ( REPO). A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security " buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use REPO' s extensively to finance their positions.

Safekeeping. A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection.

SEC Rule 15C3- 1. See uniform net capital rule.

Secondary Market. A market made for the purchase and sale of outstanding issues following the initial distribution.

Securities and Exchange Commission SEC). Agency created by Congress to protect investors in securities transactions by administering securities legislation.

Treasury Bills. A non -interest bearing discount security issued by the U. S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.

Treasury Bond. Long- term U. S. Treasury securities having initial maturities of more than ten years.

Treasury Notes. Intermediate term coupon bearing U. S. Treasury securities having initial maturities from one to ten years.

U. S. Government Securities. Various types of marketable securities issued by the U. S. Treasury, including bills, notes, and bonds. Such securities are direct obligations of the U. S. Government and differ mainly in the length of their maturity.

Weighted - Average Life. The weightedaverage life refers to the average amount of time that will elapse from the date of a security's issuance until each dollar of principal is repaid to the investor.

Yield. The rate of annual income return on an investment, expressed as a percentage. ( a) Income Yield is obtained by dividing the current dollar income by the current market price of the security. ( b) Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

Uniform Net Capital Rule. Securities and Exchange Commission requirement that member firms as well as nonmember broker -dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

Zero -Coupon Security. A security that makes no periodic interest payments but instead is sold at a deep discount from its face value.